As in many other developing countries, Egypt has witnessed the phenomenon of accelerated urban sprawl and the resultant informal housing development. Historically, most city nodes in Egypt are separated from desert hinterlands by agricultural barriers. Therefore, urban sprawl has often occurred at the expense of fertile agricultural lands, and that signifies one of the foremost socio-economic threats that face urban development strategies in Egypt. In addition, urban sprawl in Egypt has commonly been accompanied by major deteriorations in the urban housing environment. The city of Assiut, which is one of the most important urban centres in the southern part of Egypt, is representative of that phenomenon. This paper aims at exploring the scale of informal housing problem in the city, and identifying the reasons behind the occurrence of informal. housing growth. The paper ends by formulating a comprehensive strategy of informal housing development in Egypt that could develop the existing informal and unplanned settlements and curb any future deterioration. The paper is based on the results of a recent empirical fieldwork that was conducted in the summer of 2001, and concludes by depicting a general framework of a comprehensive strategy of informal housing development in Egypt.